Bank of America commercial loan modification “in-house” programs offer a variety exciting promises to commercial building owners. Unfortunately, these promises rarely carry through to the real world. In most cases, a Bank of America commercial loan modification is much like Santa Claus or the Easter Bunny…a well organized fantasy.
Challenges with Bank of America Commercial Loan Modification
Negotiating a loan modification with Bank of America on a commercial or non-residential loan can be quite time consuming and frustrating. There are not presently any type of government directives or institutional pressure on banks, such as Bank of America, to modify commercial loans. Put simply, no one seems to care about commercial loans or commercial owners.
HAMP and Other Government Programs Do Not Apply to Commercial Loan Modifications
The programs sponsored by the US government and the Treasury such as HAMP and MHA (Making Home Affordable), simply do not apply to commercial loan modifications. Any Bank of America commercial loan modification offered would have to be a lender’s “in house” program. Unfortunately, “in house” programs typically are less favorable and typically take longer to qualify for than their government sponsored counterparts. That’s not to say commercial loan modifications can not be negotiated, they just can’t be done under HAMP like residential loan modifications.
Bank of America Commercial Loan Modification Document Requirements
Applying for a Bank of America Commercial loan modification typically requires the production of a great number of documents that residential loan modification does not. This includes virtually all items related to the income generated from the property (leases, advertising, other sources of income) as well as documents and information related to the expenses of operating the building (utilities, maintenance, management, etc.). The Bank of America commercial loan modification decision will be made largely on cash flow and income generated from the building, so those documents are critical.
Favorable Aspects to Bank of America Commercial Loan Modification
With a commercial loan modification, the risk/reward is generally much greater for the lender, which can work in the commercial borrowers favor. Since Bank of America commercial loans are, on average, much larger than their residential counterparts, the potential loss for Bank of America can also be much higher. The cost of foreclosing on a commercial property is much greater, if the property becomes an REO after foreclosure the lender will have to hold it longer and also faces having to manage it in the interim, pay maintenance and property taxes and become an absentee landlord. All these factors make it much more advantageous for a lender to continue generating income from the commercial asset “as is,” even if it’s slightly less income, than to go through the painful foreclosure process.
California Commercial Loan Modification Attorneys
McFarlin LLP attorneys handle all aspects of Bank of America commercial loan modifications for borrowers in Los Angeles, Long Beach, Santa Ana, Anaheim, Carson, Gardena, Costa Mesa and throughout California. Our attorneys are available to provide you with honest reliable advice at our Irvine office or over the phone. With a matter as important as commercial loan modification and foreclosure, it is a very good idea to consider hiring qualified commercial loan modification lawyers to represent you and protect your interests. Call us today at (888) 728-0044.